J.C. Penney: 'Don't Play Games With The Customer'

In February, J.C. Penney began a long transformation that includes eliminating hundreds of sales events in favor of everyday prices on most items, a transformation that many predict will rip the retailer to pieces in the marketplace. Especially because they also discontinued dividends to help fund this massive change. This is not the pretty picture CEO Ron Johnson depicts. However, Ron Johnson has had incredible success at major companies, starting with Target, onto Apple, and now with J.C. Penney. His success with Apple is a major contributing factor to the kinds of change going on at JCP.

How do you market the ending of sales and coupons? The new pricing structure at JCP is a drastic shift from what we are used to seeing at the retailer's many stores. So, instead of constant sales and coupons, J.C. Penney will have three levels of pricing: everyday, best price, (which are clearance items), and month-long value (where they discount certain themed items for a month). Comparatively competitive prices, even with most online competition, they hold the lowest price.Yet, the first quarter results proved to be poor as the company's stock price fell by 12.5 percent and customer traffic also fell by 10 percent.

"It's one big year we have to get through ... We are trying to essentially convert the Titanic into 1,100 wave runners, and that is really hard to do," CEO Ron Johnson said at the analyst meeting, in which vendors, like Martha Stewart, were present.

Recent controversy over spokesperson Ellen DeGeneres being a homosexual, got some pretty heavy media coverage, but can be looked at in a positive light. The company, rather than drop her because of public outcry, kept her on as the company's spokesperson. This sends a clear message of change at J.C. Penney, and one that should be readily accepted by Americans.

Here is a CBS interview with CEO Ron Johnson about the controversy, the transformation, his work, and the future of JCP.

http://www.youtube.com/watch?v=VfZKntQZSbo&feature=related


Although this change sounds good when Johnson speaks, it has not reached the ears of consumers. They will need a much stronger marketing strategy. I'm interested, and I love Ron Johnson's work, but I feel that without my preceding interest, I would have never heard of the new pricing at JCP. They need to get out there, in the media. This is a really cool change, and could be a revolution in retailing. Having, essentially, a "Mall of designers" in one store, is a pretty cool concept. Bringing products to customers, based on what they like, and providing it at a cost, based on what they want to pay, sounds commonsensical, but it is rarely seen in as pure a form as what JCP is trying to do. When you replace a tradition of coupons and sales with a no-haggle solid price, it isn't as fun for the involved consumer. However, in a noise-filled world, some straight and forward would be greatly appreciated. Designing a straight and forward marketing plan will be essential to their success with this new transformation.

Good luck JCP, good luck.